In battle with Big Oil, Newsom rips into Valero’s 500% rise in profit amid soaring gas prices
Updated: Wednesday, March 9 2002 03:20 MST
By Ed Mendel The energy industry is in a tailspin. The price of gasoline is soaring because of the surging demand in the U.S. and abroad for fuel. Enron Corp., the Texas-based energy trading giant, is the world’s largest energy trader. It has seen its profits soar to levels last seen only as recently as 1989, and has gone from trading natural gas to trading oil and other energy products. But with profits in the tens of millions of dollars, Newsom has done more than complain and threaten. He’s delivered the blow, and with it a warning. “If you were to start cutting the price of gasoline because of the profit margins in the industry,” says Newsom, “it would be like cutting back the value of the money you have in your pocket.”
The state of California and the nation’s energy industry are in a tailspin. With the price of gasoline at $4.50 or higher a gallon, Californians who have the energy to drive to work are running out of gas and driving less. The demand for gasoline in the state is about 50% greater than a year ago, according to a survey by the Energy Information Administration.
A look at a recent survey by Oil Price Intelligence shows how the state is experiencing this pain: The price of gas in Los Angeles, the nation’s most populous city, has jumped to $3.25 a gallon. At that price, if you bought gas at the pump every day in L.A. for the last few weeks, you would have spent $8,000 in fuel that you could have had for $4.50 a gallon in a week.
In San Francisco, the price has risen to $3.85 a gallon. At that price, if you bought gas at the pump each day for the last week, you would have spent $6,000 in gas you could have had for $3